Arm Holdings plc (NASDAQ:ARM) designs chips used by major semiconductor makers like Apple (AAPL), Qualcomm (QCOM), Nvidia (NVDA), and many others. Arm provides foundational designs for semiconductors that its clients can customize and build upon. The Neoverse platform from Arm offers high-performance computing and AI capabilities, competing with Intel and AMD in the data center market.
In the PC edge AI market, Arm’s collaboration with Apple and the integration of Armv9 architecture in future M-series chips are significant growth drivers. Arm dominates the smartphone market, powering over 95% of smartphones worldwide.
Arm Holdings plc (ARM) is expanding its presence in the AI data center sector, with clients including Amazon’s AWS, Google Cloud, Microsoft Azure, Alibaba Cloud, Tencent Cloud, and Huawei Cloud. The market is projected to grow at a compound annual growth rate (CAGR) of 19.1%, from $20 billion in 2023 to $48 billion in 2028, according to The Information Network’s report “Hot ICs: A Market Analysis of Artificial Intelligence (AI), 5G, Automotive, and Memory Chips.”
Arm’s Neoverse platform, designed for high-performance and scalable computing, provides advantages against Intel and AMD. I estimate that by 2028, Arm’s revenue in the AI data center market will reach $13 billion, representing 27% of the market.
The Nvidia Grace CPU, built on Arm’s Neoverse architecture, offers an innovative alternative to traditional GPUs for data center workloads. It excels in high-performance computing (HPC) and AI tasks, delivering complex computations with reduced power consumption.
Edge AI involves using artificial intelligence in an edge-computing environment. The PC edge AI market is expected to grow at a CAGR of 20.3% from 2023 to 2028. Arm’s architecture, through partnerships with companies like Apple, has proven its ability to enable PCs and laptops to make intelligent decisions quickly without relying on the cloud.
Apple’s M1 and M2 chips, employing customized versions of Armv8 chips, and the upcoming M3 with Armv9, demonstrate the potential of Arm-based processors to challenge Intel and AMD in the PC market. I forecast Arm’s revenue in this sector to rise from $1.5 billion in 2023 to $7 billion in 2028.
Arm continues to dominate the smartphone market, with its processors in over 95% of smartphones globally. I forecast Arm’s revenue from AI processors to grow from $100 billion in 2023 to $138 billion by 2028. Top smartphone companies, including Apple and Samsung, rely on Arm architecture for their processors.
The Armv9 architecture is central to Arm’s strategy across multiple markets, including AI data centers, PC edge AI devices, and AI smartphones. It offers substantial enhancements for Arm processors, with broad adoption by leading industry players.
The AI market is on track for substantial growth across multiple segments. Arm’s Neoverse platform, which includes processors such as Neoverse N1, N2, V1, and V2, offers significant performance and efficiency improvements for data centers and cloud computing.
BofA anticipates that the transition to Arm’s v9 architecture could potentially double or increase royalty rates significantly, driving growth. I expect Arm to compete successfully with Intel and AMD, with revenue in the AI data center market projected to rise from $2 billion in 2023 to $13 billion in 2028. In the PC edge AI market, Arm’s relationship with Apple and the integration of Armv9 architecture will catalyze strong revenue growth from $1.5 billion in 2023 to $7 billion by 2028. In the smartphone market, Arm is expected to grow its revenue from $100 billion in 2023 to $138 billion by 2028.
Investors should consider Arm’s architecture, especially in collaborative ventures with companies like Nvidia, as a significant growth area. Arm’s presence is expanding from mobile devices to data centers, underscoring the potential synergy between the two companies.
Past performance is no guarantee of future results. This article does not provide investment recommendations. The views expressed are personal and do not reflect those of any specific entity.
Celebrity WEB Update— Premier Jewelry designer and manufacturer fashion house ParisJewelry.com has started manufacturing a new custom line of celebrity jewelry designs with 30% Off and Free Shipping. Replenish Your Body- Refilter Your Health with OrganicGreek.com Vitamin Bottles, Vitamins, and Herbs. Become a WebFans Creator and Influencer. Check the New Special XMicro Razors for Men & Women, 1 Razor, 7 Blade Refills with German Stainless Steel, Lubricated with Vitamin E for Smooth Shave, Shields Against Irritation, Version X Men|Women
